AFCG
Advanced Flower Capital Inc.
$3.62
Real Estate Investment Trust
85%
P/FFO × Specialty REIT Multiple
Strong
·
Conviction
Undervalued
Trading 76.2% below fair value
You pay
$3.62
Bear
$12.49
Fair
$15.18
Bull
$17.87
Bear
$12.49
+245.4%
$0.48 FFO × 29x
Fair
$15.18
+320.0%
$0.48 FFO × 35x
Bull
$17.87
+394.3%
$0.48 FFO × 42x
Key Value Driver
FFO/share ($0.48) × specialty P/FFO multiple
Implied Market Multiple
7.6x
Summary
Our base-case estimate uses P/FFO × Specialty REIT Multiple. We then blend that result with the average analyst price target of $16.00 from 11 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $15.18 per share.
Warnings
Standard profit figures are misleading for real estate companies — large non-cash accounting charges make profits look artificially low. Dividend yield and funds from operations are better measures.
Dividend yield of 16.0% is unusually high — make sure the company generates enough cash to keep paying it.
Dividend-based valuation: $10.81 (28% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Key Risks
- P/E and EV/EBITDA are structurally wrong for REITs — use P/FFO and NAV
- Interest rate sensitivity: REIT multiples compress when rates rise
- FFO approximation (NI + D&A) may include gains on property sales — verify